Tax estimate: 179 billion euros more than expected by 2025

Status: 11.11.2021 5:02 p.m.

Much more tax revenue will flow into the state coffers than previously predicted: the federal, state and local governments can expect an increase of 179 billion euros over the next few years. But there is a huge gap in debt.

Germany’s next government can expect a hefty tax increase. Because the tax estimators assume that around 179 billion euros more will flow into the coffers of the federal, state and local governments by 2025 than was predicted in May.

According to the experts, the federal government alone will earn 11.7 billion euros more than initially expected in the coming year. In the following years, things should continue to be just as good: by 2025, an additional 14 billion euros will flow into the federal budget on average each year. The government can reckon with a total of 71.7 billion euros more during this period.

Economic upturn expected

In the case of the federal states, the plus will be even higher in the coming year. You can expect additional income of 22.5 billion euros, the municipalities 8.1 billion. Tax revenues are likely to continue to increase significantly later as well.

The main reason for optimism is the expected economic upturn after the bottom of the pandemic. The recovery – dampened by delivery bottlenecks and the coronavirus episode – is not progressing as the federal government initially expected. According to the autumn forecast, however, the economy will pick up significantly in the coming year.

“This tax estimate confirms our course and gives courage for the future,” said Finance Minister Olaf Scholz (SPD) when presenting the figures. “Despite the Corona crisis, Germany is financially well positioned,” he emphasized. The measures to secure companies and maintain jobs have paid off. The next federal government could build on a solid budget and financial policy.

50 billion euros a year?

Scholz wants to lead this next cabinet as Federal Chancellor. But at the moment the coalition talks between the SPD, Greens and FDP are difficult. The latest tax estimates are therefore good news for the traffic light parties. Maybe you can afford one or the other contested project after all.

The fundamental financial problem of the traffic light, however, hardly solves additional income of the expected magnitude. An additional 50 billion euros are to be invested annually in climate protection, digitization and education – with a debt brake and without increasing taxes. The negotiators are therefore struggling to find ways to mobilize more funds, for example through the KfW development bank, public companies or investment companies.

Warning from the Federal Audit Office

The budget situation is tight because of the pandemic. The crisis has torn a huge hole in national budgets. In 2020 and 2021, the federal government approved new debts of more than 370 billion euros. According to preliminary plans, almost 100 billion euros in loans could be taken out in the coming year with the debt brake suspended. The Federal Audit Office has just warned that the federal debt mountain threatens to rise to almost 1.5 trillion euros by the end of 2022. “The federal government has exhausted its financial leeway,” it said.

Reference-www.tagesschau.de

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